HARRISBURG, Pa. — Penn State President Neeli Bendapudi urged state lawmakers to increase the University’s state funding for the first time in five years and encouraged them to implement a performance-based funding model for the state’s public universities during a hearing today (Feb. 29) of the House Appropriations Committee in Harrisburg.
Bendapudi was joined at the appropriations hearing for Pennsylvania’s state-related universities by Lincoln University President Brenda Allen, Temple University President Richard Englert, and University of Pittsburgh Chancellor Joan Gabel.
In her testimony, Bendapudi highlighted Penn State’s significant, positive impact across the commonwealth. From providing an accessible and affordable education that is recognized worldwide for its high quality; to solving complex challenges and generating new knowledge through the University’s world-class research enterprise; to serving local communities through resources like Penn State Extension, Invent Penn State and Penn State Health, Bendapudi said Penn State’s nearly 170-year partnership with the commonwealth continues to return huge dividends for Pennsylvanians.
“Penn State is a globally recognized, high-quality, cutting-edge institution that is a valuable asset to the commonwealth and the country, providing billions of dollars in economic impact every year,” Bendapudi said.
In particular, with almost 400,000 alumni living and working in Pennsylvania, and with more than 50,000 Pennsylvania residents enrolled across all campuses and levels of education, Bendapudi said Penn State is uniquely positioned to help Pennsylvania retain its young talent and remain competitive on the national and global stages.
Bendapudi also told lawmakers that despite its statewide impact and despite educating more Pennsylvania resident students than any other public, four-year university in the state, Penn State remains the lowest-funded university in the commonwealth on a per-student basis — an imbalance that she is eager to work with the General Assembly and governor to address.
“Penn State ranks dead last in the state in per-student support, receiving $5,757 per Pennsylvania student. That is significantly below all of our peers — it is between $3,000 and $3,700 less per student,” Bendapudi said. “I strongly urge you to continue to invest in our peers that are here, this is not a plea to take away from anyone, but it is a desperate plea to please bring us to parity. It is no exaggeration to say Penn State is one of the lowest-funded public universities, on a per-student basis, in all of American higher education.
“It’s difficult for me to explain to a student, to a faculty member, or a staff member at any of our Commonwealth Campuses, which are social, economic and cultural hubs for their communities, why the education of a Penn State student, a Pennsylvania resident, at one of these campuses is not funded at the same level as students at PASSHE or any of our fellow state-related institutions.”
Based on 2022-23 data, the $5,757 Penn State receives per Pennsylvania resident undergraduate is well below the national average and significantly behind the per-student support received by the Pennsylvania State System of Higher Education ($8,754), Temple ($9,233) and Pitt ($9,436).
Pennsylvania Gov. Josh Shapiro’s draft state budget includes a 5% funding increase for Pennsylvania’s state-related universities, including Penn State and Pennsylvania College of Technology, to be distributed through a proposed new performance-based funding model.
“We appreciate the governor’s proposed 5% increase in funding for the state-related universities, but Penn State needs more. I urge the General Assembly to closely examine and act on our appropriation request to help close this funding gap,” Bendapudi said in a written statement to the committee. “Greater investment in Penn State is vital to our access and affordability mission and to offering innovative academic programs that align with Pennsylvania’s workforce needs — thus supporting our efforts to attract the state’s brightest students and prepare them for successful careers here in Pennsylvania.”
In its 2024-25 appropriation request to the commonwealth, the University is seeking general support funding of $368.1 million, an increase of $126 million over 2023-24, which would raise the University’s per-student funding to the same level as the PASSHE universities. Penn State’s general support appropriation has been held flat at $242.1 million since a 2% increase was implemented for the 2019-20 fiscal year.
This funding is used to offer a discounted in-state tuition rate that benefits approximately 42,000 Pennsylvania resident undergraduates and their families each year. Penn State significantly amplifies the state’s $5,757 per-student investment, with the average Pennsylvania resident undergraduate paying $15,000 less for tuition annually than their nonresident peers.
Performance-based funding for higher education
Bendapudi, who has been a strong advocate for performance-based funding, called on elected leaders to act during the current legislative session to implement such a funding model for Pennsylvania higher education.
“To bridge the funding gap among public universities, I have given my full support to working with the General Assembly, governor and fellow university leaders to design performance-based funding metrics that harmonize funding incentives with the commonwealth's workforce and economic development needs,” Bendapudi said. “By distributing funding in this way, we can assure that the state and its universities are aligned on shared goals for student success and positive student outcomes, which are the guiding light for everything we do at Penn State.”
She said that for performance-based funding to be effective, the model must be transparent, simple, aligned with shared state and university goals, and flexible to account for the unique structure and mission of each institution.
Bendapudi also stressed the need to grow the state’s investment in its public universities, rather than just reallocate existing resources.
Additionally, as part of her support for performance-based funding, Bendapudi noted Penn State’s commitment to accountability and transparency, which led the University to create a new accountability report and website last fall at psu.edu/accountability.
Penn State’s road map for the future
Bendapudi also updated lawmakers on current budget challenges facing the University and the steps being taken to develop a more sustainable model for the delivery of a high-quality Penn State education.
Penn State remains on track to balance its budget by fiscal year 2025-26, but Bendapudi cautioned that the financial and demographic challenges facing all of higher education remain and will require careful planning and new ways of thinking.
“As we enter a new era in public higher education, it is no secret that at Penn State we are facing headwinds, just as is the case nationally,” Bendapudi said. “This is my second time appearing before you. Last year I told you about a significant budget deficit. We are making huge progress, but we still have a ways to go. As we adapt to the changing landscape, our North Star, our guiding principle, is ensuring student success. Every single decision we make, we’re doing so with the lens of what is best for our students and for their success during their time at Penn State and beyond. We are truly committed to aligning what we do with what is in the best interest of the commonwealth.
“Among the changes we made, we adopted a two-year budget to enhance budget predictability for our students, for our families, and for us as an institution. We adopted a budget model that aligns strategic allocation of resources to the students that we serve, and we put access and affordability as the priority and at the forefront of decision-making. To guide the University, I introduced a road map for Penn State’s future outlining the many steps we are taking to keep us moving forward and to make strategic investments for the success of the institution and the commonwealth.”
Bendapudi said Penn State remains fully committed to its public access mission and to serving the citizens of Pennsylvania, but in order for the University to remain a truly exceptional public research university that is capable of achieving greatness at scale in both its academic and research missions, it is imperative for the commonwealth to continue to invest in Penn State.
“Our goal is to deliver the highest quality educational experience in an affordable and accessible manner for students of all backgrounds and means,” Bendapudi said. “With student tuition and state dollars as the two primary funding sources for our education budget, regular increases in our state appropriation are critical to keeping costs low for students, while also allowing us to make strategic investments in our academic programs so that our students are workforce-ready to meet the challenges of today, right here in Pennsylvania.”
Bendapudi also was asked about efforts to recruit students and employees from underrepresented communities and to invest in diversity, equity, inclusion and belonging. Among ongoing efforts to address and invest in this critical issue, Bendapudi highlighted four workstreams that are underway to address key DEIB challenges, including an equity-centered resource “hub” for students to access answers, connections and support resources; a faculty hiring program to help diversify Penn State’s faculty; a staff hiring program to address staff diversity and to support staff in their career and professional development; and an enhanced approach for reporting wrongdoing and bias.
“We really have made thoughtful investments,” Bendapudi said. “One of the things we have done, specifically around racial justice, is making sure that there are procedures across all academic units to create faculty recruitment plans. The idea is that when you do tenure-line searches, it is important that we develop diverse candidate pools. We also are continuing support for the President’s Opportunity Fund — we invested about $2 million last year in diversity efforts, and we are investing $2 million again this year.”
The hearing, part of the commonwealth’s annual budget-setting process, saw lawmakers and university leaders discuss a variety of topics impacting higher education, including enrollments, economic and workforce development, sexual assault prevention and student debt. A recording of the hearing is available here.
Penn State’s funding is expected to be finalized by the end of the fiscal year on June 30. Penn State students, faculty, staff, alumni and friends can showcase Penn State’s impact and voice their support for the University’s funding during Capital Day on March 18. Learn more about supporting Penn State’s legislative priorities by signing up to become a Penn State Advocate at psu.edu/advocate.